FORUM: Will agencies welcome ITV’s new sales stance? - ITV sales points have started doing what everyone has been waiting for them to do for the last four years - make ’share of broadcast’ the centrepiece of all discussions with ad

A couple of months ago, Campaign asked a handful of TV buyers to predict the big issues in this year’s round of annual airtime negotiations.

A couple of months ago, Campaign asked a handful of TV buyers to

predict the big issues in this year’s round of annual airtime

negotiations.



A broad range of topics was raised but only one common strand appeared -

without exception, the buyers said they expected ITV to provide

incentives for advertisers to use ITV as a whole.



Traditionally, the three ITV sales houses have been obsessed with

competing against each other and have been seemingly oblivious to the

fact that Channel 4, Channel 5 and satellite have been nicking an ever

increasing share of the whole TV market.



As a result, Laser, TSMS and Carlton have been squabbling over an ever

decreasing ITV pot. Now they realise it’s time to call a truce and

insist on negotiations based on ITV’s share of all the client’s

broadcast spend.



In other words, decree that the more a client spends on ITV as a whole,

the bigger the discount it can get.



For years, agencies have sniggered at ITV’s stupidity in failing to take

this obvious step. One buyer, from one of the biggest players in the

market, even stated recently (off the record, of course) that this

failure was ’the biggest mistake in the network’s history’.



Well, surprise, surprise, ITV sales houses have decided that this year,

they’re actually going to do share of broadcast deals. And guess

what?



Media specialists are apoplectic with rage. Advertisers in the

membership of the Incorporated Society of British Advertisers - many of

them at least - are also unhappy bunnies.



Isn’t this a bit rich? They knew it would happen. Sales bosses admit to

being taken aback by the vehemence of the public comment last week as

the issue began to surface. Mick Desmond, the chief executive of Laser

Sales, maintains share of broadcast deals have been around for a long

time at ITV. But he does admit that the climate is changing. ’If an

advertiser is not giving the ITV network a reasonable share of its

budget, can it expect to gain access to our premium programmes, such as

sport?’ he says.



’I am here to make as much money as possible for Laser in competition

with all other television sales points but I am very conscious that the

more money that comes into ITV, the more the network will have to spend

on its schedule - and the more we will be able to deliver for

advertisers. National channels have been putting similar pressures on

advertisers for a couple of years now.’



Martin Bowley, the managing director of Carlton UK Sales, can’t see what

the fuss is about either. He comments: ’ITV is completely reinvigorated

these days. We have something extremely powerful to sell. If you take

the broad view, we are seeing a result of the fact that there is no more

discount to be had from ITV - and, in fact, we are now pulling discount

back. Agencies don’t like it. More discount each year has been a fact of

life for them for the last God knows how long. But I was amazed at some

of the comments I saw in the press last week. I do not think it reflects

well on the agencies concerned.’



Agencies, though, believe they have genuine concerns on a number of

points.



First, that the sales houses have been acting incredibly arrogantly,

presenting their view of the future as a fait accompli. Second, that the

sales houses have been chancing their arm in a major way - setting the

share they expect to get at a ludicrously high level. For instance, ITV

took, on average, 65 per cent of all TV spend last year. There are

indications that it wishes advertisers to spend the same proportion of

their budgets on ITV again next year - even though ITV share of impacts

will almost certainly be down. In other words, the network is using this

as an excuse to charge more of a premium for its airtime.



But the third concern is the most serious. Media specialists and some

clients are very worried that the three sales points could effectively

be working in collusion. Obviously, they have all hit on the same policy

at the same time. That isn’t a problem - but if it goes further than

that and they co-ordinate policy on individual deals, that would be a

cartel and clearly illegal. The Incorporated Society of British

Advertisers and the Institute of Practitioners in Advertising are

monitoring the situation and are discussing how they might construct a

joint response to the developments.



Jim Marshall, the chief executive of MediaVest, agrees that there is

cause for concern. He believes that it’s possible he could be penalised

by one sales house if he didn’t use the other two. ’Sky might talk to me

about share of broadcast but it’s not contingent on what I spend on all

satellite channels. You can’t sign a deal that proscribes what you sign

with other organisations. Clients must have the opportunity to deliver

against their marketing objectives and, in seeking to do that, have the

ability to deal with each sales house quite separately.’



If ITV succeeds, the policy will, of course, be a disaster for Channel

4, Channel 5 and satellite. Or will it? Absolutely not, insists Nick

Milligan, the sales director of Channel 5. ’Money follows viewing and

that is why ITV has a problem. Share of broadcast deals based on

audience not (as ITV sales points propose) on revenue will be the

future. ITV has never been in such a weak position. Its volume of

audience is at its lowest and its profile the oldest it has ever been.

ITV wants to punish advertisers who want to follow the audience. A

position of ’no support, no sport’ is quite ironic when its best sport

is sold separately to most deals,’ he says.



And Milligan is sceptical whether the sales houses have the resolve to

stick to their guns over this new policy. ’Judging from agencies’

reactions, I think the market has already made up its mind. Agencies and

advertisers don’t like being told what to do and now they have a choice.

Channels 4 and 5 and satellite will provide that comfort. A number of

buying points will dig their heels in and buy national stations until

ITV compromises.



ITV’s sales policy could be the best Christmas present that we could

have wished for.’



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